Is Cryptocurrency Ruining the GPU Market?


Building a computer is an act of pure joy.

It can take months to design the right machine: deliberating over minor differences between parts, finding the best prices, deciding when is the right time to pull the trigger. And once the parts start to come in, there’s nothing like gently removing each shiny new piece of technology from its respective packaging.


In July of 2017, I was going through the process of building a new computer. Before even starting the build, I had settled on a GTX 1070 as the heart of the gaming machine I was to build. Reviews pegged it as the best card for the money and, barring anything new and exciting, it was the obvious choice. At around $450, it was far pricier than any card I had purchased before, but I had already made peace with the price point. After all, I would definitely be getting what I paid for.

The day finally came to choose which of these cards I’d be dropping into my system. I had an idea which brand I wanted to go with – the same that was currently in my system – I just had to pick which specific iteration of the card I wanted. Only…none were under $800.


To make a long story short, I eventually “settled” on a GTX 1080 Ti, but not before doing a fair amount of reading. What I discovered was that a surge in cryptocurrency prices over the beginning of 2017 had lead to a corresponding surge in cryptocurrency mining. Now, I had heard about cryptocurrency before, but I didn’t really know all that much about it. And I had never heard about cryptocurrency mining. But, apparently, those were the two reasons why the GPU market was so skewed. And I didn’t really think about it again until the markets recovered, then hit another bump at the beginning of 2018.

So…what is cryptocurrency anyway? What has it been doing to the GPU market over the past year? And, most importantly, is it ruining the GPU market for everyone else?

What exactly is Cryptocurrency?

Generally speaking, cryptocurrency is a form of electronic currency that uses cryptography to secure transactions, verify the transfer of assets, and control the creation of new units of currency (according to Wikipedia).

Bitcoin is likely the most recognizable cryptocurrency, more for its meteoric rise than anything else. But besides insane price gains over the last year, there is plenty else of note about this particular currency. It was first released in 2009 as the first deregulated currency, and has since paved the way for Ethereum, Litecoin, and countless other ‘altcoins’ that are dominating the exploding cryptocurrency markets. It’s worth noting that many of these coins are, in fact, based on Bitcoin, so without Bitcoin as a precursor, many (or all) of these coins might not exist at all!

What is Cryptocurrency Mining?

I mentioned before that Bitcoin is an unregulated currency (a tag that extends to all other cryptocurrencies available at the moment). This means that the price and supply of cryptocurrency isn’t controlled by banks or regulatory agencies. Instead, this means that the initial price point for the currency is set upon its release, and that the supply of the currency is produced by the community supporting it.

This is where mining comes in.

Without diving too far down the rabbit hole, individuals create new cryptocurrency and verify transactions of specific currencies by way of mining. In this case, “mining” refers to using the processing power of computers [and increasingly, specialised hardware that can only do this task for Bitcoin, and GPUs for other cryptocurrencies -Ed.] to complete these two tasks.

There’s much more that could be said about both subjects, and I encourage anyone interested in the nuts and bolts of how cryptocurrencies work to go read more, but for the sake of brevity, I’ll leave the explanation at that.

So What?

At this point, you’re likely asking whether you should care about all of this, and the honest answer is “probably not.” Staunch followers of crypto markets and avid investors already know all of this and more. And unless you plan on following cryptocurrencies, this is probably more than you’ll ever need to know. But as a baseline, this information serves as a sufficient preamble to understanding one of the far-reaching effects of cryptocurrency mining over the past year.

The Mid-2017 Mining Boom

Ethereum Price chart, 1 year

In May of 2017, an increase in the price of Ethereum was accompanied by a significant uptick in mining. And since the mining of Ethereum is GPU-based, the result was a sudden an unexpected strain on the GPU market. None of the major GPU suppliers were prepared for such a massive increase in sales, so by July of 2017, many of the most desirable cards from both Nvidia and AMD were scarce. And those that were available could be purchase well over their MSRP. 

Further, the unavailability of some cards had the side effect of driving the prices of lower-end cards well above their intended price point. A perfect example of this would be the GTX 1060 (both the 3gb and 6gb versions of the card). Both were supposed to fit in a price point somewhere in the low $200 range, but the 3gb card was pushed closer to $260, while the 6gb card was typically at, or over, $300.

During this particular boom, only the most expensive Nvidia cards – the 1080 and 1080 Ti – managed to weather the storm of price surges. Despite meager availability of other Nvidia and AMD cards, these two were easy to get a hold of at their intended price point.

By early fall, pricing and availability started to return to normal. The mining surge was over.

The Current Mining Boom

One year price history of an MSI GTX 1070 8GB

As 2017 wore on, Bitcoin (and related cryptocurrencies) continued to surge. By December, Bitcoin was nearing $20,000 per coin (an increase of over 1000% in value since the beginning of the year). And when Ethereum followed, reaching a little over $1400 per coin, a second mining push began – one that we’re still very much in the middle of, though steadily falling crypto prices have many thinking that the current boom will be ending sooner rather than later.

But this push has been far more detrimental to the GPU market.

The availability and pricing of nearly every available GPU has been impacted. The most popular cards for mining have surged in prices, with costs nearly doubling in some cases (as they did during the mining push in mid-2017), and even some the cards that weren’t hit before have seen significant increases in pricing. The graph above is an example of a MSI GTX 1070 8GB (I’m using this particular card as a reference because it had the most complete data over on pcpartpicker). While there were price hikes in the middle of 2017, they were nothing compared to the uptick of GPU prices that are still gripping the market even today.

How does this affect me?

Honestly, unless you’re planning on building a new computer, the current GPU shortage shouldn’t affect you in the least. But for those who regularly undertake the task of building computers, the current state of things is prohibitive.

While the cost of every other component has remained flat, the skyrocketing costs of the single most important part of a computer has made it nearly impossible to build a gaming computer without breaking the bank. The current shortage is so bad, in fact, that an extremely reputable PG gaming site has (for the first time ever) suggested that individuals looking to build a new computer, instead, consider buying a pre-built rig.

For building enthusiasts, this is nothing short of heresy!

Is this the new normal?

4 cryptocurrency mining rigs

Yes and no. Despite widespread availability, cryptocurrency is still in its infancy. With confidence low (from a traditional investing standpoint) and volatility high, many are still nervous about the viability and future efficacy of the multitude of currencies popping up on the markets. For the few true believers, however, now is the best time to join the fray. And with every surge in the markets, more converts will throw in for their piece of the pie. We saw it once last year and again at the beginning of this year.

But for all of the concentrated activity around each of these mining booms, I doubt that the disrupted GPU markets will remain a constant fixture in the PC industry. I’m sure we’ll see a fair few more of these shortages over the course of 2018 and beyond, but at some point something has to give. Either the cryptocurrency market will adjust, driving down the desirability of mining, or the companies producing GPUs will have to increase their production.

For now, I don’t see either of these things happening.

While mining has posed a significant drain on the GPU market, these bursts of interest haven’t been enough for any of the major GPU companies to consider significantly increasing their production or supply. Instead, they seem more interested in restricting sales. Many manufacturers limit purchases to “one per customer” on their sites. And many retailers have limited customer purchases to two or three to discourage miners from easily depleting their stock. But that still hasn’t completely remedied the issue.

Two major GPU companies – Asus and Sapphire – have tried to take advantage of these mining booms by producing cards specifically designed for cryptocurrency mining, but aside from an announcement in the middle of 2017, I haven’t seen or heard much about these specially designed cards. Nor have I heard much about their desirability over standard consumer graphics cards.

On the other hand, the price of cryptocurrency has remained attractive enough to draw even more people into mining. At the end of 2017, just before the current boom, I helped a friend of mine build a few mining rigs. As you can imagine, the price of a six GPU mining rig is somewhat hefty, but when all is said and done, its ability to make money is undeniable. Even at normal GPU prices, and with the increased utility cost, each rig is capable of paying itself off in anywhere from six to nine months. And, after that, any mining it does is theoretically pure profit. [Assuming no additional hashing power is added to the network, and that both the cryptocurrency and electricity prices remain constant. -Ed]

Perhaps “Fear of Missing Out” is the biggest reason we’ve seen such significant surges in mining over the past year. With cryptocurrency skyrocketing in price and the ability to make real money becoming more feasible by the day, it stands to reason that many others would be interested in taking part (and while GPU prices were more reasonable, I was tempted as well).

Future Outlook

For now, I don’t really see the end of the current boom. Many are trying to get into mining at the moment while cryptocurrency prices are high, and the result is that pretty much every GPU is either scarce, or ridiculously overpriced. A quick trip over to newegg shows a 1050 Ti going for $219.99, a price point held by the 1060 3gb a little over a month ago. Right now, that same 1060 is going for $739.55!

And pretty much anything more powerful is going for over $1000.

That being said, I’m not sure cryptocurrency is ruining the GPU market. Not completely, anyway. As long as surges in mining follow the rise and fall of cryptocurrency, then I suspect we’ll be fine. Of course, PC building enthusiasts will have to keep an eagle eye on GPU prices, and likely alter build schedules to take them into account, but I suspect it’s something we can all live with. On the other hand, if mining becomes a more permanent (and even more prevalent) fixture of cryptocurrency space, we might be in for a bit more of a pinch while GPU producers figure out their production levels to account for the increased demand.

Either way, anyone on the market for a new GPU should be ready to wait for a few months for prices to improve, but I doubt things will return to normal in 2018. Patience will likely be the most valuable commodity for potential buyers this year and in the foreseeable future.

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  • Do Little

    Cryptocurrency has no intrinsic value and isn’t recognized as legal tender in most jurisdictions. It’s basically worth what people are willing to pay for it – which is a classic recipe for scams, ponzi schemes and bubbles. As proceeds of crime are laundered through these currencies, governments are taking note and regulation is coming. I’m not going to try and predict where crypto will end up but I believe it’s going to be a bumpy ride!

    February 8, 2018 at 9:27 AM
    • Rammel Kas Do Little

      It’s always been their game plan to gradually over time encourage people to trade in these currencies such that it drives up the general acceptance. Or at least this was what main users of these said back when they first came into circulation quite a few years ago now.

      However there’s a sting in this tail. If it gets to a point where they are readily assigned an accessible market value then what prevents tax authorities from assigning a tax value to any gains? Whether by reference to the currency or whatever it ends up being exchanged for? We’re so close to THAT point that several governments are in fact circulating white papers on this topic internally.

      February 8, 2018 at 10:56 AM
      • Do Little Rammel Kas

        If governments tax the capital gain, they must also allow people to claim the capital loss. It then becomes likely exchanges will setup in tax havens where gains are not taxed and losses ignored. I will watch with interest – but from the sidelines!

        February 8, 2018 at 11:15 AM
      • phuzz Rammel Kas

        I’ve always assumed that crypto-currencies would be taxed in a similar way to any other foreign currency.

        February 8, 2018 at 12:39 PM
      • Aderoth Anstian Rammel Kas

        To tax a cryptocurrency, a government would have to be able to connect a wallet ID# to a person. The only way this happens is if the person who owns that wallet ID# claims it as his/her own.

        February 8, 2018 at 2:25 PM
        • Rammel Kas Aderoth Anstian

          Only partly correct. The thinking is they only need to wait until it is exchanged for other investments, goods or services then go after the value of the devaluation of the other party’s estate. So the ID# is of no relevance when the Crypto owner comes into the open like that. They will may quite simply fall into the usual sales tax systems at that point. Who knows?

          The Crypto owner can’t avoid such a crystallizing event if they intend to use it for the value. And of course the higher the value gains until then the nastier the sting will be if and when the governments do begin to tax it. Thinking that governments will overlook such a source of revenue forever is a bit naive.

          February 8, 2018 at 3:41 PM
          • Anoni Mouse Rammel Kas

            crypto, and gains made on it, are already taxable as capital gains. Anyone who cashed out at 20k a coin will either be giving Uncle Sam his cut or looking over his shoulder for the men with guns.

            February 13, 2018 at 9:19 PM
        • Anoni Mouse Aderoth Anstian

          which they need to do to use an exchange to transfer it back to fiat, or if they buy anything that needs to be shipped.

          February 13, 2018 at 9:18 PM
    • Alot Do Little

      While its true that currencies have no intrinsic value, most currencies these days have little more then a government promise of value either. Several currencies used to be backed by gold standards, where in theory you could go exchange each note you had for a very small sliver of gold. These days I see little conceptual difference between the obscure arcane blubberfest whereby official currencies are guaranteed value in a prim and proper way as opposed to the relatively straight forward limited release schedule of bitcoin (and eventual supply cap) which it is running on.

      The thing about currency is that it is a completely made up concept. Currency has no actual basis in reality besides for how individuals (and communities) decide to interact with it. While its going to be bumpy as heck, and could crash, fly or explode, I’m a bit skeptical of governments ability to regulate what was designed to be an anonymous independent trading platform.

      February 8, 2018 at 11:26 AM
      • Anoni Mouse Alot

        Crypto lacks even a governmental promise, the reason that the promise there is so important is because at the end of the day governments have a monopoly on the only time tested currency that actually matters, the legitimate use of violence.

        As for regulating it, they will get you at tax time with a 200% penalty, garnered wages, and possible jail time.

        February 13, 2018 at 9:17 PM
        • Plus points on the monopoly of violence comment. As to the possibility of regulating it, I’m interested to see how that goes.

          February 13, 2018 at 10:08 PM
  • Bertram Renning

    For people interesting in learning more about cryptocurrency I highly recommend to read the abstract and introduction of the original white paper by Satoshi Nakamoto : .
    The “why” and “what” are rather well explain and accessible. The rest of the paper is about the “how” and may be a little less self explanatory.

    February 8, 2018 at 9:45 AM
  • Pew Pew

    When Leyland Stanford moved to California during the gold rush he worked out there was more money in selling shovels than there was in digging for gold. He earned enough for a university.

    In the long run the big winner from all this will probably be the grapics card makers. They must be laughing so hard right now.

    February 8, 2018 at 1:26 PM
    • Alot Pew Pew

      Agreed. Unexpected flash-buyouts of all GPU products isn’t hurting the GPU industry, its just making it more difficult for the previous majority buyer of the product. From a gamer’s perspective, the question should be whether these new use cases (and flash boosts in sales) in any way increases the research budget of card companies or if the added revenue goes straight to share holders.

      February 9, 2018 at 8:33 AM
      • Anoni Mouse Alot

        I don’t know if card companies are the ones seeing the benefit. Newegg is the one making the profit.

        February 13, 2018 at 9:15 PM
        • Could you explain who Newegg is? I’m not seeing how having every single product you produce ripped from the shelf can fail to increase profits.

          February 13, 2018 at 10:10 PM
          • Anoni Mouse Alot

            New egg is kinda like amazon, they will increase the price of a product online depending on demand.
            In some cases they have a supply of them, in others they are selling a given number a 3rd party says they have. Either way the card company didn’t know to charge newegg more then msrp when it sold the cards to them, so the increase from $700 to $1200 should leave them with a significantly increased profit margin.

            I could be wrong, but since NVidia was willing to sell people 1080ti’s for msrp last week (I got a notification, but they where sold out before I noticed the email) I don’t think they are the ones exploiting gamers and miners.

            February 14, 2018 at 1:54 PM
  • Violent Tempest

    If you are looking for GPUs and having issues finding them in the stores check out this site where you can setup notifications and find in stock GPUs.

    February 8, 2018 at 7:21 PM
  • DickDastardly

    Any home user who buys the newest GPU is crazy so they’ll still pay the prices as they’re paying for prestige and bragging rights and not for the performance that they actually need.

    The newest games don’t need the newest cards to play on ‘ulta high’. Buy a card that came out a year ago, they’re cheap (1/3 to 1/4 the price of the newest cards) and will do everything you need for 2 years then just buy another one. You’ll see no difference in the way your games/apps play but it’ll cost you significantly less.

    February 9, 2018 at 3:09 PM
    • Carvj94 DickDastardly

      Thats the problem though. Old cards are 20-60% more expensive.

      February 10, 2018 at 1:56 AM
    • Anoni Mouse DickDastardly

      The 1080 came out a year ago.

      Also, very few cards will do 4k gaming at 60fps.
      The Vega series can barely, along with the 1080.
      Only the 1080ti, as far as I know, can handle it well.

      February 13, 2018 at 9:21 PM
  • Cryptocurrencies are fucking stupid.

    February 10, 2018 at 2:25 AM